Wynn Resorts has joined Las Vegas Sands (LVS) in warning that it will pull out of the Japan IR race should the substantial cost of development ultimately prove too high.
LVS Chief Operating Officer Rob Goldstein revealed last month that soaring capex expectations were casting some doubt on the potential to achieve necessary returns, suggesting an investment of US$12 billion was now considered a likely requirement for development of any IR in a major Japanese city.
Echoing those comments, Wynn CEO Matt Maddox told analysts during the company’s 3Q19 earnings call on Thursday that, “We are going to pursue Japan with vigor but we will not pursue it if it does not make financial sense.
“We’re going to be very disciplined in terms of how any structure is put together, what the costs are going to be and what the return profile is going to be.
“We like the Japanese market, we think that it will be a very high revenue market, but we’re focused on making sure it will be something that our shareholders will also like.”
Wynn Resorts recently joined LVS and Melco Resorts in pulling out of the race for an Osaka IR, focusing its efforts instead on the Tokyo Bay area which includes the cities of Tokyo and Yokohama. Tokyo is yet to commit to hosting an IR.
Maddox also stated on Thursday his belief that the IR process in Japan will take longer than many are hoping – likely pushing the launch date for Japan’s first IRs into the late 2020s.
“I still believe that this is going to be a longer process than a lot of people are anticipating,” he said of Wynn’s Japan efforts.
“We have people on the ground. We’re building up our team. And we’re going to make sure that if there is something that’s right for Wynn that it is financially sound, that the project is something that will change the company and we’re with partners that share our same values.”
RelatedPosts
